Under the plans, individuals who buy an electric car by 2020 would not have to pay vehicle tax for ten years, reported the paper. Support could also include a research programme which would boost the development of batteries.

The parliamentary groups of Chancellor Angela Merkel's conservatives and her Social Democrat (SPD) partners, have agreed on the main points and could agree on the full package on Thursday, ending months of haggling, said the paper.

Purchase incentives are also possible but they would be decided later at a meeting of Merkel, SPD Economy Minister Sigmar Gabriel and auto chiefs.

The government aims to increase the number of electric cars on German roads to a million by 2020 from just 50,000.

A passion for fast, powerful cars among German drivers has fed demand for petrol and diesel engines, and Germany lags countries such as Norway and the Netherlands in subsidies and providing charging points for electric cars.